Wolves held City at Molineux earlier in August and took them all the way to penalties in the Carabao Cup past season.
Guardiola's title-chasing team have scored no fewer than 16 goals in their last two matches.
But Nuno, who has hailed Guardiola as one of the greatest managers of all time, said: "We will not be afraid – we don’t go on the pitch scared.
"You just have to be ready for what is in front of you; a big challenge, a fantastic team.
"Ok, let's go and compete, realising we have to be very organised and compact.
"The priority in all the games for us is the defensive organisation we have.
"That is always the way we have to know in the game.
"If that is so, you cannot be scared or frightened of anything.
"We have to play the game the way we do it – when you don't have the ball you have to defend, when you have the ball you have to attack."
Wolves go into the game having beaten Premier League leaders Liverpool in the FA Cup, albeit a severely weakened Reds side.
"It was very important, no doubt about it," Nuno said.
"It was a moment of joy. We had a good performance against a very tough team, and we achieved what we wanted - to go to the next round.
"The cup is there, we let it be, and we prepare for the next challenge – a big challenge – on Monday."
Wolves have seriously impressed against the league's 'big six'.
Nuno said he couldn't explain why their record was so good, when they've dropped points against teams lower in the table.
"If I had the answer to that, I’d be a happy man," he added.
"It’s very difficult. We approach always the same, we spend the same time, we go through the same levels of motivation and play the game as we want.
"Sometimes it works, sometimes it doesn’t.
"It’s difficult to answer that. There’s no clear why, and it’s not an issue."
"All the opponents deserve the same approach and the same respect."
“We consider all of them very, very strong. The pressure is always the same.
“All the managers, if they had the answer to that, they’d be very happy men.”
After a busy festive period Wolves have enjoyed a full week without a game, since the Liverpool cup game.
“It’s important, having a full cycle of training sessions," Nuno said.
“I think we can take advantage, to become better.
“This is what we want. After such a tight schedule, a clean week of work is good for us, to recover well more than prepare for the game.
“That full week is very good for us.
“It’s going to be tough (tonight), we have no doubts about it. It’s a fantastic team with a fantastic manager and fantastic players.
“We know, and we have to prepare ourselves for it."